Frank Corporation Has an Asset with a Fair Market Value

question 23

Multiple Choice

Frank Corporation has an asset with a fair market value of $200,000 that it wants to lease.Frank's wants to recover its net investment in the leased asset and earn a 10% return.The asset will revert back to Frank's at the end of a 6-year lease term.If Frank's charges rent annually at the beginning of the year, what should amount should the annual rent be (rounded to whole dollars) ?

• A)$18,817
• B)$33,333
• C)$41,747
• D)$53,333

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Definitions:

Certificate of Authenticity

A document or seal that verifies the authenticity of an item or artwork, usually by the creator or issuing authority.

Foreign LLPs

Limited liability partnerships established in one jurisdiction but registered to do business in another jurisdiction, often with different legal implications.

Distribution

The process of delivering or spreading goods, services, or financial assets from a central point to multiple recipients or locations.

Limited Partnership

A partnership consisting of at least one general partner, who manages the business and is personally liable for debts, and one or more limited partners, who contribute capital and have limited liabilities.